4/29/2015
By Jennifer Coombs

The US dollar took a massive hit this week after the first quarter reading for the US gross domestic product (GDP) came in well below consensus at a pathetic +0.2%. This compares to a reading of +2.2% in Q4-2014 and the +1.0% consensus estimate for Q1-2015. Weather issues, as well as weak exports thanks to the strong US dollar caused economic growth to collapse, and in turn, the major equity indices.

In another positive check point for housing data, pending home sales increased for the third month in a row, rising by 1.1% in March and outpacing economist estimates at 1.0%. Ultimately, this is indicative of what would be a very welcome third consecutive gain for final sales of existing homes, which surged 6.1% in the latest report. On a regional basis, strength in pending sales was centered on the South – the largest housing region. Pending sales in the South jumped a whopping 4.0% from the prior month for a year-over-year gain of 12.4%. Sales in the West were also strong, increasing by 1.7% for the month for a year-over-year gain of 15.6%. The overall change in pending home sales versus the same time last year is a healthy 11.1%. A pick up in the sales of existing homes is hopefully giving the signal that improvement is occurring in the new home market which currently remains weak. Last month’s weak report for housing starts and permits is still troubling to economists, and despite this positive report, remains the elephant in the room.

Jennifer Coombs
Wall Street Strategies

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